ACTION ALERT: CURRENT LEGISLATION TO PAY PROMISED SOLAR TAX CREDITS

Dubuque County residents stand to lose $156,276 in promised solar tax credits.

As many as 3,000 residential solar owners will lose the expired Iowa tax credit unless the Legislature funds the waitlist.

We now have live bills proposing to restore tax credits to those on the waitlist! Thank you to Representative Bergan for introducing HF 2395, and to Senator Klimesh for introducing SF 2326. These bills would buy down the current residential solar tax credit waitlist and allow those who completed the interconnection process by December 31, 2021 to apply for the tax credits until June 30, 2022.

WHAT YOU SHOULD DO NOW!

1. Contact your legislator via phone and/or email. Ask them to support these bills, and specifically, to work with their colleagues to ensure they are enacted. If you’re set to lose your ~$3,000 tax credit, make sure they understand how much this means to you!
2. HF 2395 goes to the House Ways and Means Committee. These individuals are especially important to contact:
   1. Jane Bloomingdale, District 51 (Worth/Mitchell/Howard/Winneshiek Counties), on the subcommittee that first hears the bill
   2. Eric Gjerde, District 67 (Cedar Rapids/Marion/Hiawatha/Robins), on the subcommittee
   3. Dustin Hite, District 79 (Mahaska/Marion Counties), on the subcommittee
   4. Lee Hein, District 96 (Delaware/Jones Counties), Chair of Ways and Means
   5. Carter Nordman, District 19 (Dallas County), Vice-Chair of Ways and Means
3. SF 2326 goes to the Senate Ways and Means Committee. These individuals are especially important to contact:
   1. Dan Dawson, District 8 (Council Bluffs), Chair of Ways and Means
   2. Tim Goodwin, District 44 (Des Moines/Louisa/Muscatine Counties), Vice-Chair of Ways and Means
4. Reach out to every solar owner you know who may also be on the waitlist and encourage them to advocate!
5. Be active on social media, promote traditional media stories, tag your legislators.
6. Keep communication going with your legislators asking for progress, until a bill is passed.
7. If you have a new system, be sure to apply for the tax credit on the Department of Revenue’s website. (if you don’t apply and get on the waitlist, and then the legislature does allocate funds, you’ll be out of luck). The Department is currently issuing denial letters because the residential funds are gone, but they have assured us the waitlist will not be purged on January 1st. If the Legislature acts this coming session to fix the issue, all eligible applicants should be covered, but you must advocate.

BACKGROUND: For years, Iowa homeowners have been told the state’s solar tax credit is available for solar systems installed through 2021.

Now it appears the State of Iowa is about to break that promise. Iowa’s budget is strong and the solution is straightforward – if the Legislature acts.

The Iowa Department of Revenue’s Solar Energy System Tax Credit page says “The Iowa Solar Energy System Tax Credit expires and is unavailable under Iowa law for residential installations completed after December 31, 2021.” Seems clear enough: get the job done by the end of the year.

However, it looks like homeowners who invested in solar during the second half of 2020 and all of 2021 – believing the tax credit was available to them – are about to be hung out to dry.

Unfortunately, the Iowa solar tax credit for homes and businesses was established with a $5 million annual cap. Because applications have exceeded this amount in recent years, the Department of Revenue created a waitlist. The waitlist is over a year-long, and the Department awards credits annually in the order applications are received.

As explained on the IDR web page for the solar tax credits, Iowa law treats residential and business waitlist applicants differently when the tax credit ends on December 31st, 2021. Business applicants on the waitlist will carry forward to future years until all are paid.

Residential applicants, as the law now reads, are out of luck. Some legislators have said too bad, a tax credit with a cap is not a legally binding promise. To solar owners that did the work and made the investment, we suspect that sounds (at best) like a shirking of responsibility. Until very recently, everyone from contractors to tax accountants have assumed (wrongly, but not without good reason) that a tax credit expiring at the end of 2021 was, well, a tax credit available through 2021.

What is the magnitude of the broken promise? According to the Revenue Department, in October 2021 the waitlist of homeowners expected to lose their credit included 1,262 applicants and totaled $4,020,144 (over $3,000 per applicant). This number will grow significantly, as applications for summer and fall systems roll in.

It was noted in October 2021, Dubuque County residents stand to lose $156,276 in credits (which is about 50 systems). See the full waitlist by county here.

If you’re on Iowa’s solar residential tax credit waitlist, or have installed solar in 2021 and have yet to apply… now is the time to speak up, because your promised tax credit is on the line. Tell your legislators and Governor to do the work, PASS HF 2395 and SF 2326 to fix the waitlist, and honor the state’s promise.